How I Paid Off $80,000 In 3 Years And Became Debt-Free

I paid off $80,000 in 3 years and became debt-free: Here’s how I got started

I would have a fun weekend, notice overdraft alerts or fees on Monday, have barely enough money to eat Tuesday through Thursday, and then wait until my bi-weekly paycheck arrived in my bank account at 12:01 a.m. on Friday to start the process all over again. 

One day during the summer of 2017, a light bulb went off and I realized that while I was paying my bills on a bi-weekly basis, I wasn’t accounting for variable expenses like my weekend outings. 

I opened my work laptop, pulled up an Excel document and started making a comprehensive list of my bills and projected variable expenses. That is when I saw that I was regularly spending more than I was making in a given two-week period. 

I knew that I had to work through my aversion to budgeting if I was going to start creating better habits.

I laid out all of my expenses 

To do that, I started breaking it down piece by piece. I realized that my budget needed to have four distinct sections to paint a full picture of my financial situation.

• Income: How much money I was bringing in

• Fixed expenses: Expenses where I knew the exact amount I needed to pay and when I needed to pay it (for example, rent that’s due at the beginning of the month)

• Variable expenses: Expenses where I didn’t know the exact amount and exact date when it would come out of my account (for example, going out to brunch with friends, clothes and shoes, buying the odd coffee)

• Discretionary income: Income left over after I paid all my fixed and variable expenses

Many people often forget about variable expenses, which can lead to zero balances and overdrafts. Once I was able to account for all my money, I wanted to take a hard look at all my expenses to see where I could cut back so I could use that money towards my debt. 

I noticed that I overspent on going out, buying clothes, my apartment, haircuts, and car insurance. To control how much money went to many of those items, I created a category in my budget called “fun money.” 

Each month, I would withdraw $300 for “fun money,” put it in a dedicated, labeled cash envelope, and hold myself to only spending what I had allotted for the month. This system helped me to spend with intention and without regret. 

To negotiate my car insurance down to a lower rate, I told my insurance company that I was considering using another insurance company because of the price. It’s funny how companies mysteriously find discounts when they realize you’re about to leave.

I also decided to move into a three-bedroom house with a few friends. This drastically cut down my housing costs, which is often the largest monthly expense for many people. I used what I saved to pay down debt.

I chose a debt-payoff method that worked for me 

Now, it was time to put this extra cash towards my loans. In my research, I found that there were a number of different debt payoff methods. 

The debt avalanche method involves making minimum payments on all debt, and then using any remaining money to pay off the debt with the highest interest rate. The debt snowball method lets you make minimum payments on all your debt but instead of paying the debt with the highest interest rate, you instead pay off the smallest debts first to get them out of the way before moving on to bigger ones.

The avalanche method can often result in lower payments over time. And the snowball method can be valuable if you’re looking for small, quick wins as you are beginning your debt-free journey. 

Alternatively, you can choose to do both or what some call the hybrid method, which is what I did. I started with the debt avalanche method and switched to the debt snowball method when I felt like I needed more motivation.

I shared my story and built a community 

Another way I created a wider gap between my income and total expenses was making a career change. I decided to switch to a sales job where I was personally more in control of my total income. 

With my budget in place, I aggressively paid off my credit cards at the beginning of 2017, paid off my car at the end of 2017, and paid off my student loans in July of 2020. 

In 2019, I also started documenting my entire journey on my Instagram page, BetterWallet. Now I use the platform to teach others good money habits so they can reach their version of financial freedom. 

To me, financial freedom means being able to travel the world without concern, buying real estate, investing, and passing down wealth to my family. Ultimately, while my debt-free journey may have been one of the hardest experiences of my life, it was also one of the most rewarding.  

Marc Russell is a foster child turned financial educator. Coming from a low-income family, he put himself through college and paid off $80,000 in debt after graduating. Marc spent much of his career at two of the largest financial institutions in the world where he consulted thousands of households on how to manage their money: the right way. Now, the owner and founder of BetterWallet, LLC, Marc teaches people all around the world how to make money work for them.